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I know what you're thinking. Another week, another all-time high in the stock market—the 25th new record for the Standard & Poor's 500 this year, the 47th for the Russell 2000 index (the most of any year since 1997). It's enough to make you glum, mad, incredulous, or all of the above. Is it records fatigue or disbelief, or did you really sell in May and go away? But yes, let's hold the smattering of half-hearted applause.

Like Marilyn Monroe—voted the century's sexiest woman by the likes of People and Playboy; zero Oscar nominations—this bull market is more popular than it is respected. With each new high, asset allocators from Asia to Europe are steering more money to U.S. stocks. Stock buyers are brushing aside $3.63-a-gallon gasoline and rising mortgage rates. And investors are paying more for each dollar companies earn: The S&P 500 trades at 15.5 times projected profits, up from 12 times about a year ago.

Yet the buying is accompanied by much hissing and dissing. First-half growth of 1.4% was derided as "subpar" by the commentariat. This earnings season has been faulted for flat sales and declining profit forecasts. Low ball targets helped 69% of reporting companies beat second-quarter projections, but the extent by which they surpassed projections has shrunk to just 3%, the smallest in four years, notes Strategas Research. And let's not forget how our records are goosed by central banks' diligent administering of performance-enhancing drugs.

This leaves us with a choice of narratives. Pessimists fear that sentiment has run ahead of economic fundamentals. Optimists still believe that stocks are a predictor of economic prospects, and hope gross domestic product will eventually catch up. The 99-percenters acknowledge that easy money, surging stocks, and dormant wages have benefited Wall Street more than Main Street, and find it hard to fully embrace the rally. And realists argue the bullish trot is swelled by a dearth of compelling alternatives, what with commodities and emerging markets held back by Chinese slack, and bonds squeezed by rising interest rates.

Was July's slower hiring just a blip? Manufacturing rebounded last month with its biggest gain since 1995, and the two-month pace matched that seen coming out of recessions. The U.S. is adding 192,000 jobs a month this year, up from 183,000 in 2012, and in line with real growth of about 3%. This supports the notion that GDP might pick up.

Small stocks most sensitized to U.S. growth also broke out in July and jumped 6.9%, trumping big caps' 5% gain. Our Federal Reserve is still printing money, and growth-hungry investors fleeing emerging markets are turning to small U.S. stocks, notes Nicholas Colas, ConvergEx Group's chief market strategist. "Commodity prices are in retreat, and labor-cost inflation is still low," he says, which helps small companies with less bargaining power. The Russell also has just 4% of its weight in defensive consumer staples, versus 10% for the S&P 500, making the Russell the preferred vehicle for riding a cyclical upturn.

Still, stocks up 26% since November are already counting heavily on economic acceleration. Stocks aren't rich by historical standards, but they're no longer cheap, either. In fact, since the market's 2009 lows, our economy has grown by $1.3 trillion, while the stock market has swelled by $12 trillion. "Significant monetary stimulus, the end of fiscal austerity, a booming housing market, a cheap dollar, record corporate-cash balances...if the U.S. economy does not significantly accelerate in coming quarters, it likely never will," writes Michael Hartnett, Bank of America Merrill Lynch's chief investment strategist.

But be careful what you wish for. "When the real economy finally stands up, the central bankers will start to stand down," Hartnett adds. The dollar and volatility will surge as the era of deleveraging dies. A return to a more-normal regime—now that's something to applaud.

ONCE UPON A TIME, HOME OWNERSHIP was an American dream, until it was interrupted by the financial crisis. Now, a rash of real-estate investment trusts that buy single-family homes to rent out is betting we'll keep renting a lot longer.

The bullish case goes like this: U.S. home ownership has slipped to 65% from its peak of 69.2% in late-2004. Mortgages are still affordable, but banks would rather lend to people who don't need loans. Recession-scarred young Americans starting households are more likely to rent than buy. And if prices rise, management can sell properties for gains, adding potential growth to dividends.